Sales tax

A sales tax is a percentage tax on the sales price of taxable goods, products and services. The seller bears the responsibility for assessing and collecting sales tax, but the tax is typically passed through to the end customer at the time of purchase.

Some jurisdictions refer to their sales tax regime as a privilege tax or excise tax. In Arizona for example, their sales tax is referred to as a Transaction Privilege Tax as it is imposed directly on the seller for the “privilege” of doing business in the jurisdiction. In Hawaii, they impose a General Excise Tax, which is a tax on gross receipts from all business activities, that like a sales tax may be passed through to the customer.